Gemfields, which operates the Kagem emerald mine in Lufwanyama, has announced the results of an emerald auction comprising a series of five sequential mini-auctions held between 15 March and 17 April 2021). The proceeds of this auction will be fully repatriated to Kagem in Zambia, with all royalties due to the Government of the Republic of Zambia being paid on the full sales prices achieved at the auction.
Operations at Kagem, which remained suspended for a year till March 2021as a result of the Covid-19 pandemic, are expected to ramp back up to full scale by the end of April 2021.
During the year-long suspension of all but critical operations, Kagem employees (excluding those on critical operations) were placed on leave with 80% of basic salaries, in line with the new Employment Code Act 2019 (Act No. 3 of 2019) throughout the suspension period, despite not working.
Kagem has been able to avoid redundancies and retain its workforce due to the financial support provided by the majority shareholder, Gemfields.
The auction contained a selection of grades that are typically offered at auctions of higher quality Kagem emeralds. Selected lots were made available for in-person and private viewings by customers in Tel Aviv, Dubai and Jaipur. Following the viewings, the auctions took place via an online auction platform specifically adapted for Gemfields and which permitted customers from multiple jurisdictions to participate in a sealed-bid process.
Highlights – March & April 2021 Emerald Auction
- Total auction revenues of USD 31.4 million
- Average price of USD 115.59 per carat
- Of the 37 lots offered, 36 were sold (97%)
- 99% of the carats offered at the auction were sold
Prices achieved during the series of mini-auctions held in November and December 2020 were robust but resulted in a slightly lower average price per carat. The March and April 2021 sales included the finer qualities of emerald that were not offered in the November and December 2020 sales and this has contributed to the increased price per carat achieved in the most recent auction series. Combining the results from the November-December 2020 sales with those from the March-April 2021 sales provides a more balanced view, with an average sales price of USD 93.21 per carat, an all-time high.
Adrian Banks, Gemfields’ Managing Director of Product & Sales, commented:
“This was Kagem’s highest auction revenue since March 2016 and we were very pleased to see such strong demand and pricing. Because operations were suspended at Kagem in March 2020, the world’s largest emerald mine produced no new emeralds for more than a year. Due to the arising supply and demand dynamics, a number of our clients have therefore seen this auction as a vital opportunity to purchase emeralds. Today’s result also means that Kagem has already surpassed the aggregate auction revenues achieved in the whole of 2020, which stood at just USD 22.4 million as a result of the fall-out from the Covid-19 pandemic.
Gemfields is excited to be back in business after the lengthy pause in both mining and sales and – as always – we extend our sincere thanks to our hard-working teams, to our host government in Zambia, and to our customers for their ongoing support.”